Green APL Coaching

Does the recession have a silver lining?

Everybody that lives in the UK will surely have heard about the current recession, unless perhaps, if they live in solitary confinement. The newspapers, news bulletins, television programmes are full of doom and gloom stories. Job cuts here, wage freezes there, failing businesses and bankruptcy. The North West of England has not been able to escape. In the local South Manchester area jobs have been cut and businesses closed. However, do these articles and programmes give the full picture, or does the recession perhaps have a silver lining?

Many solid businesses exist in the UK, with the recession providing a minor irritation rather than a full blown disaster. Is it possible that we could learn some valuable lessons from these enterprises? Of course, different sectors of the economy have been hit by different amounts. Clearly construction, banking and housing market have been all badly affected, to name just a few. However, sometimes one company’s demise can be another’s gain.

Sure enough, one sector’s loss can be another’s gain. Just look at banking for example, this sector have been saddled with many bad debts as lenders default on their loans. This is bad news for the banks, but great news for debt collection agencies, which are finding themselves in a boom period. Perhaps some restaurants may be struggling, as people look to dine out less. However, this presents an opportunity for the supermarkets as more is spent on the weekly shop.

Unfortunately, many businesses begin to struggle in a downturn and this can perhaps be attributed to their apparent lack of adequate planning. The old adage ‘fail to plan, plan to fail’ is quite appropriate at present. Many companies enjoyed making good money and expanding rapidly during the good times. However, their heavy borrowing and high costs make staying afloat increasingly difficult. Banks are unwilling to extend overdrafts or provide additional loans. Consequently, there is no more money to bail the companies out of their financial difficulties. From the company’s point of view they believed the good times were here to stay, nothing could spoil the party. How wrong they could be, as Britain slides into an ever deeper recession.

It’s quite alarming how many companies fail to heed the warnings of the past and the tale which history tells. As with almost anything which you care to mention on Earth and beyond, things are cyclical. Just look at the weather, the seasons and even life itself. The housing market and stock market follow cycles, and so too does the economy. There are good times and bad times, the recession has proved the good times never last for ever. So with so many companies being caught out, what can one do to ensure their business survives in these challenging times?

Firstly, a business needs to be lean, which means all costs are kept to an absolute minimum. This will allow the company to compete effectively in the market both during the recession and through the economic recovery thereafter. Business leaders must ask themselves many critical questions, such as: Does the business really need luxury offices in an expensive part of the city? Is it necessary to provide top of the range company cars? Must we fly our employees on business class tickets? Is it necessary to have so many different layers of management? As with any business, the issues may be complex and the answers not always apparent.

Similar questions can apply to small business owners on a smaller scale: Do we need such a big office or premises? Have we got the best phone/broadband deals? How much money do we need to spend on advertising? Whatever the size of the business, the more unnecessary costs which are incurred, the greater profits will suffer.

When income decreases, cost saving is a necessity, however, perhaps in the cost cutting aftermath other questions should be considered: Why were the costs so high previously before the recession? Was each cost strictly necessary? What can be done differently in future to prevent a similar situation occurring within the company again?

Shrewd businesses will put away money during the good times so as to insulate themselves during the bad. As sure as night follows day, depressions and recoveries will always occur eventually. Businesses which are not reliant on outside investment will probably enjoy a much stronger position than those laden with debt.

Adequate planning must be in place for all eventualities.

It is during the planning stage when coaching can provide some really great benefits. The coach will be able to help the business set itself goals for the future, in addition to making their own road map to success. Coaching will help the business to become more focused and see the situation with greater clarity.

Through working with a great coach, the company leaders will be able to consider the bigger picture which envelopes the company. By considering, planning and knowing the business’ goals, the downturns will certainly be less painful experiences.

A recession can provide as many new opportunities as unfortunate losses. The skill lies in noticing these opportunities and turning them to your advantage.

By Andrew Lochery

Green APL Coaching

www.greenaplcoaching.co.uk